The Central Govt has approved the 'Startup India Seed Fund Scheme (SISFS) to provide the financial assistance to startups through Corpus of Rs.945 Crore vide NOTIFICATION NO. S.O. 414 (E) [F.NO.P-38015/5/2020-STARTUP INDIA] Dt: 21st January 2021
Startup India initiative
The Startup India is a flagship initiative of Government of India, intended to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. This initiative launched by Government of India during the year 2015. The action plan for this initiative is in the following areas.
- Simplification and handholding
- Funding support and incentives
- Industry-Academia Partnership and Incubation
This scheme will support startups across all the sectors. The fund will be disbursed through selected incubators across India in 2021-25.
Role of Incubators
The Incubators basically help grows a startup from an early stage idea to a firm that can stand on its own and their services includes office space, administrative functions, education and mentorship, access to investors and capital and idea generation etc.
Purpose of SISFS Scheme
The financial assistance provided under this SISFS scheme to startups for proof of concept, prototype development, product trails, market entry and commercialisation.
The SISFS would enable the startups to graduate to a level where they able to raise the investments from Investors, Venture capitalist or seek loans from commercial banks or financial institution.
Eligibility criteria for Startups under SISFS
- A Startup recognised by the Department for Promotion of Industry and Internal Trade ( DPIIT)
- A startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling
- A startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted
- Preference would be given to startups creating innovative solutions in sectors such as
- social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.
- A startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility
- Shareholding by Indian promoters in the startup should be at least 51% at the time of application to the incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018
- Any startup will not receive seed support more than once each as per provisions of guidelines.